GBP NZD exchange rates have seen a good boost with levels breaking back over the 1.90 target. This however has been something of a sterling story though and clients looking to buy New Zealand dollars with pounds would be wise to consider taking advantage of the higher levels which are once again available. The pound has seen a good boost against the New Zealand dollar largely as a result of a perceived better outlook for the economy and also in the Brexit negotiations.
There is a general feeling that Britain will now be offered a bespoke deal although nothing has been confirmed on whether or not the trade deal will include financial services which of course comprises such a large amount of the economy of around 80%.
The transitional arrangement talks surrounding Brexit will commence at the start of next week and any developments here should cause additional volatility for the pound. However the more complicated trade discussion will not start until March and this is where the pound is likely to see a much rougher ride. Any comments from EU leaders that suggest financial services cannot be included could see the pound weaken sharply against all of the major currencies including the kiwi dollar. The prospect of a no deal scenario cannot be ruled out at this time.
The New Zealand dollar has actually found considerable support of late as investors have moved back into New Zealand especially with everything that has been happening in the US. The prospect of a fewer interest rate increases in the US and the recent government shut down have generally resulted in a movement away from the US dollar and into currencies like the New Zealand dollar. The likelihood of further US shutdowns in the coming weeks and months could also see further volatility.
To discuss the New Zealand dollar and how these economic and political event will have a direct impact on your won currency requirement then please get in touch with me James at [email protected] and I will be happy to give you my thoughts on the markets.